From FTTX to Fiber Everywhere Mountain Connect 2017 Heather Gold, President & CEO

FTTH: incredible growth in North America United States North America 30.4 Million Homes Marketed 16% Growth in 2016 13.7 Million Homes Connected 41.5 Million Homes Marketed 18% Growth 16.6 Million Homes Connected

United States FTTH Deployment

Like the internet, fiber has changed

An Innovation Revolution, driven by fiber

Economic Development: Fiber’s Killer App Ten Year Gross Metropolitan Product: 64% Better For FTTH Cities Ten Year Job Impact: 72% Better For FTTH Cities Better Year New Business Formation: 46% Better For FTTH Cities

New employer attraction Local experts see fiber impact On Local Job and GNP Growth 88% 85% 77% 52% New employer attraction Employer expansion Employer retention Home based businesses Based on a survey of local economic experts, policymakers. RVA, LLC for Fiber Broadband Association, May 2017

Mounting evidence says: fiber is a big add MDUs MDU residents are willing to pay 2.8 percent more to purchase a condo or apartment with access to fiber optic service. Renters are willing to pay a premium of 8 percent (based on a $1000 monthly rent) for access to fiber. GDP A 2014 study found higher per capita GDP (1.1%) in communities where gigabit Internet was available. Fiber communities enjoyed approximately $1.4 billion in additional GDP over other similarly situated communities. Home Values Access to fiber may increase a home’s value by up to 3.1 percent.

FTTH creates real estate value Value of amenities to single family home

FTTH creates real estate value Value of amenities to MDU home

Now: Fiber Feeds the Innovation Economy Smart Cities From electrical grid management to traffic management. 5G Next Gen Services Streaming Video Enhanced mobile broadband, machine communication, ultra-reliable Video accounts for 70% of internet traffic – and growing Cloud Computing Internet of Things Computing, hosted servers, storage and backup need to move terabytes of data, quickly 50 billion connected devices by 2020; hundreds in each home The industry is driving fiber deeper and deeper into networks to support the way we work, play and live now.

Cloud computing needs big bandwidth Cloud computing performance depends on the internet connection – for both the front end and back end. More than 1 Exabyte of data is stored in the cloud, and as bandwidth requirements increase, fiber will be the only technology that can support the necessary network architectures. Without enough bandwidth, cloud computing would be impossible. Cloud computing includes IaaS (Infrastructure as a Service), PaaS (Platform as a Service) and SaaS (Software as a Service) as layers of services. IaaS (Infrastructure as a Service): Allows you access to storage and computer power through a web-based system. Amazon Web Services (AWS) and Microsoft Azure are accurate examples of IaaS. PaaS (Platform as a Service): It gives developers the tools to build and host web applications. [APPRENDA is an example] SaaS (Software as a Service): The applications are accessible from various client devices through a client interface, such as a web browser. [Salesforce, Google Apps are examples]

Streaming Video will continue to explode consumer internet video traffic will grow at a CAGR of 26% between 2015 and 2020 3.1X percent North America’s consumer internet video traffic grew in 2015 36% minutes (830,048 years) of video content will cross the Internet each month in 2020 436 B in North America, percent of all consumer internet traffic that will be video by 2020 85%

FTTH creates community value Importance of factors when moving

Smart Cities need smart infrastructure Smart Health Sensor Network Smart Mobility Smart Grid City Wi-Fi Energy Efficiency Healthier Cities Civic IoT Safer Streets Connected Community EPB in Chattanooga built out a fiber network to reliably manage its energy and electrical systems Hiawatha Broadband in Minnesota piloting project to use its fiber as a platform for home monitoring of patients with dimentia US Ignite and cities around the U.S. (and the world) are developing a smart city app store predicated on big bandwidth Verizon and the City of Boston are using sensors and advanced traffic signal controls to measure traffic, improve safety Santa Monica City Net provides fiber-supported Wi-Fi to its residents in public places

If you do NOT get a fiber backbone for your city, it may well trigger a new generation of economic distress. Quoting once again: "Fiber networks are seen by many as one of the most important infrastructure developments of the 21st century.” Jesse Berst: Smart City Council Senior managers in state and local government, survey by the Governing Exchange: 70% believe fiber networks should be considered a public good that government regulates and sometimes runs, similar to water, sewer and other utility services. Fiber backhaul can be a middle-mile network within the smart city ecosystem. High-bandwidth links between different parts of the city can serve as conduits for shorter cable runs to traffic lights, municipal buildings, surveillance cameras and similar assets.

Speed, performance of 5G needs fiber Enhanced Mobile Broadband Ultra-reliable, low latency communication avg. + peak channel capacity total network capacity ubiquitous availability high mobility, fast handover high reliability guaranteed availability low latency 5G is expected to deliver more than 10 Gbps speed, massive connectivity for countless IoT devices, high speed mobility to deliver reliable, seamless connectivity to users even when they are traveling in high-speed train, bus or car. Ultra low latency is very critical for self-driving connected cars, remote robotic surgery in healthcare, industrial automation systems and big data transfer between the data source and destination. A recent report from IHS Markit suggests that fiber will play very important role in both front and backhaul of 5G networks. For a high-frequency 5G spectrum to cover high connection density and high speed mobility, mobile service providers need to deploy several thousands of towers, base stations and radio heads much closer to users and devices while all these cellular towers and base stations need to be connected with future-proof high speed optical fiber networks. Base stations are being deployed closer and closer for 3G to 4G/4GAdvanced to 5G at separation from 10km to 2 km and further to 0.5km. 5G will also be a good opportunity for cable operators as fiber is necessary to meet targeted requirements of 5G with higher capacity and coverage, better signal integrity, low latency and reliability. The cost of fiber deployment is relatively high; however wireless operators need to invest heavily in the fiberization of cellular infrastructure to support future-proof and reliable capacity requirements. Massive Machine to Machine Communication huge amounts of devices scarce short messages random, connectionless low power, low cost

Stepping stones to 5G, paved with fiber Femto cell Stepping stones to 5G, paved with fiber Network Densification Micro cell Pico cell Cisco estimates small cells will have increased 11-fold between 2013 and 2018. Backhaul Small cells need expanded backhaul capabilities. As in other places in the network, fiber is the backhaul solution. Metro cell Mobile Providers in Need A report from Strategy& says providers with the largest installed base of fiber will win the day.

5G Fiber needs The ITU-T defined 5G base station requirements to be 20 Gbps download and 10 Gbps upload. This can only be realized through fiber-based networks. 5G will deliver more than 10 Gbps speed, connectivity for IoT devices, high speed mobility. Ultra low latency is critical for self-driving connected cars, remote robotic surgery, industrial automation and big data transfer. As shown on next slide – requires massive new fiber deployment for coverage

Densification requires much more fiber 3G 1 site every 10 km Cell density=1 cell/100 km2 4G 1 site every 2km Cell density= 5 x 5 = 25 cells/100 km2 To go from 3G to 4G require 25X more fiber 5G 1 site for every 0.5 km Cell density= 20 x 20 = 400 cells To go to 5G requires at least 16X more fiber

Bandwidth deluge from IoT to be fiber fed 1 5 Wearables Healthcare Fitness Trackers, Smartwatches, VR Headsets, Headphones, Health Trackers, Wearable Cameras, Smart Clothing At Home care, Remote Monitoring, Post-surgery Analytics and Diagnosis, Health Information Technology 2 6 Energy Manufacturing Active Energy Management, Wind, Solar, Hydroelectric, Oil & Gas, Grid Management Process Control, Maintenance, Manufacturing Execution Systems, Asset Location, Smart Agriculture & Farming 3 7 Intelligent shopping Security & Public Safety These days it seems that just about everything is getting smarter, from thermostats to refrigerators to factories, and becoming ever-more connected. Each of these devices — physical objects with data sensing, analyzing, and recording functions plus the ability to communicate remotely — collectively form the “Internet of Things” (IoT), one of the latest buzz phrases in all areas of technology. Estimates put the number of these devices, in all applications, at 3.8 billion in use today, with growth projected to between 25 and 50 billion by 2020 and a market size of $19 trillion. Clearly, expansion in the use of smart devices is an unstoppable force, but one thing could hamper this growth — inadequate bandwidth. While most of the devices that comprise the IoT communicate wirelessly with the world, all the data that they send must be transmitted over a physical network between wireless access points. In the average home, for instance, each of the thermostats, cameras, appliances, and even “Dash buttons” must use the home’s internet connection to send the data which makes them so useful. In instances where integrated AV and home control systems are also installed, the amount of data travelling through the home network via the internet is exploding, and as with any highway, when the amount of traffic increases dramatically, the speed of travel decreases just as noticeably. So what form of connectivity can provide the data superhighway that the IoT depends on to keep accelerating? Only fiber optic cables can deliver the bandwidth and reliability required to form the backbone of the IoT. The highest performance classes of copper-based cables currently used throughout the AV market, Cat7, can transmit 40 gigabytes of data for distances of 30 m; fiber optic cables can currently send up to 100 gigs over 10 kilometers, with unlimited potential bandwidth growth in the future. With the number of devices that need to send and receive data increasing exponentially, only fiber optic cables offer the current performance and future-proof potential required to create networks capable of handling the data communications tsunami created by the IoT. Supply Chain Control, NFC Payments. Games, Smart Restocking and Rotation Video Surveillance, Access Control, Radiation Monitoring, Other Hazards 4 8 Home automation Connected car Smart Home Management, Energy, Water, Security, Climate Control Fleet Management, Asset Tracking, Infotainment

Fiber optic sensing uses laser interrogation of fiber optic cable to remotely and instantaneously detect pipeline leaks, vehicle traffic, human traffic, digging activity, seismic activity, unsafe temperatures, loss of structural integrity, and other conditions and activities. On a constant basis, fiber optic sensing accurately pinpoints the location of events from miles away. Fiber Optic Sensing

Average Rating: Deployment Challenges What keeps there from being More Fiber: Average Rating: Deployment Challenges Lower numbers equal greater importance

Rural areas, FTTH availability is lowest, but share is highest 15% Availability 63% Average Take Rate 26% Availability 43% Average Take Rate 30% Availability 50% Average Take Rate

Fiber Broadband Association on the issues

Fiber Broadband Association educates consumers

Where can you network with the leaders in the all fiber industry Where can you network with the leaders in the all fiber industry? Where can you learn how to efficiently and effectively deploy a new network – regardless of ownership? How do you grow and monetize your existing networks? How will you provide the cutting-edge services key to customer satisfaction? MEET US IN ORLANDO TO FIND OUT HOW Register online at fiberconnect.org

A Day Made of Glass

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